RAFI™ Strategies

Strategies / RAFI

Jump to RAFI Strategies | Related Content

RAFI strategies aim to generate excess returns versus the market benchmark through a systematic, contrarian rebalancing approach.

AT A GLANCE

rev-icon-assets

Approximately USD 166 billion track RAFI strategies
(as of 03/31/2021)

Icon_Investment_Vehicles

More than 200 ETFs, mutual funds, commingled funds, and managed accounts offer Research Affiliates methodologies

Icon_Partners_Affiliates

RAFI indices are trusted globally as the foundation of smart beta strategies

Delivering on the promise of smart beta

RAFI strategies aim to generate excess returns versus the market benchmark through a systematic, contrarian rebalancing approach. RAFI strategies are designed to be transparent, broadly diversified, high capacity, and low cost.

Before "smart beta" there was RAFI

In 2005, long before smart beta gained wide recognition, Research Affiliates introduced the RAFI Fundamental Index. As an established leader in smart beta with a 10-year track record, the Research Affiliates methodologies and RAFI indices are trusted globally as the underlying foundation for many smart beta strategies.

RAFI Strategies

RAFI
Multi-Factor

RAFI Multi-Factor

A smart beta equity strategy that offers diversified factor exposures through allocations to value, low volatility, quality, momentum, and size.

Learn More

RAFI Multi-Factor Climate Transition

RAFI Multi-Factor Climate Transition

Strategies that offer diversified factor exposures and integrate objectives related to greenhouse gas emissions reductions.

Learn More

RAFI
Fundamental Index

RAFI Fundamental Index

A non-price-weighted index strategy that aims to deliver excess return versus the cap-weighted benchmark by using fundamental measures of company size to systematically rebalance against the market’s constantly shifting expectations.

Learn More

RAFI
ESG

RAFI ESG

Strategies that combine the pioneering Fundamental Index approach with thoughtfully designed environmental, social, and governance investment themes.

Learn More

RAFI
Bonds

RAFI Bonds

A strategy that weights a company’s debt according to fundamental measures of the firm’s debt service capacity—book value of assets, gross sales, gross dividends, and cash flow—rather than the amount of debt outstanding. The result is an index with lower credit risk, lower volatility, and better risk-adjusted returns.

Learn More

RAFI
Low Volatility

RAFI Low Volatility

A strategy that efficiently efficiently reduces equity risk, while maintaining attractive valuations and broadly diversified market exposures.

Learn More

Related Content

Buy High and Sell Low with Index Funds!
Buy High and Sell Low with Index Funds!
By Rob Arnott, Vitali Kalesnik, Lillian Wu
Traditional index funds match market performance and have negligible trading costs with low tracking error—or do they? Not actually—they routinely buy after high price appreciation and sell after high price depreciation. They also have significant trading costs from adding and deleting stocks. We show how index providers can construct better-performing indices that are less prone to performance chasing and have lower turnover. The changes we suggest have the potential to boost index fund performance by about 15 basis points a year with just 25 basis points of tracking error. That’s a material benefit when fund managers compete based on fee differences as small as a single basis point!
Value in Recessions and Recoveries
Value in Recessions and Recoveries
By Vitali Kalesnik, Ari Polychronopoulos
Recessionary periods create risks and opportunities for value investors. Historically, value outperforms the market during downturns that follow the bursting of a bubble and does relatively worse versus the market in downturns caused by a shock to fundamentals. In recoveries, value (along with quality and size) has strongly outperformed the market as uncertainty around the crisis resolves. The first-quarter 2020 downturn was triggered by a severe shock to fundamentals and, consistent with experience, value underperformed. The bubble-like extreme valuation dispersion before the crisis only widened in the downturn to a record high. Should the bubble burst, the closing valuation gap would imply potential substantial gains for value investors. Winner of the Savvy Investor Awards 2020 for highly commended best factor investing paper.
Standing Alone Against the Crowd: Abandon Value? Now?!?
Standing Alone Against the Crowd: Abandon Value? Now?!?
By Rob Arnott, Amie Ko, Jonathan Treussard

Since the 1957 launch of capitalization-weighted indices, critics of these indices have pointed out it makes no sense to put more money into a company just because the company is expensive—that is, all else equal, if a company’s valuation multiple doubles, the cap index’s exposure to that stock doubles. Yet for a half-century, academe has taught investors a finance theory orthodoxy anchored on the concept of efficient markets, which requires us to view the world of investments from a cap-weight-centric perspective.
© 2021 Research Affiliates, LLC. All Rights Reserved.

Cookies Disclaimer

The content provided on this website is informational, subject to change and is not investment advice or any offer or solicitation for the purchase or sale of investments.  Any use of this content is subject to and evidence of the user’s acceptance of all important legal disclosures, disclaimers, terms of use and provisions found at https://www.researchaffiliates.com/en_us/legal/cookie-policy.html, including the user’s complete release of liability for any use of the content, which may contain inaccuracies. 

This site uses cookies on our website to distinguish you from other users of our website.  Our objective is to optimize your experience when you browse our website and to continually improve our site.  Consenting to the use of these conditions is not a condition of using the website, however, if you do not consent, you will be redirected to a static website with limited information.  Please select “Accept” if you consent to our use of cookies, pursuant to our Cookies Policy, during your visit to our website.  Otherwise, please select “Decline” if you do not consent to our use of cookies during your visit to our website.  A copy of our Cookies Policy can be found at https://www.researchaffiliates.com/en_us/legal/cookie-policy.html.

Decline Accept

Disclaimer

You are now leaving the Research Affiliates, LLC website.  The following link may contain information concerning investments, products or other information.  Research Affiliates, LLC is not responsible for the accuracy or completeness of information on non-affiliated websites and does not make any representation regarding the advisability of investing in any investment fund or other investment product or vehicle.  Importantly, Research Affiliates, LLC is not compensated for linking you to any non-affiliated website and instead is only compensated with an asset-based fee as either a licensor of intellectual property or a sub-adviser to an investment adviser.  The material available on non-affiliated websites has been produced by entities that are not affiliated with Research Affiliates, LLC.  Descriptions of, references to, or links to products or publications within any non-affiliated linked website does not imply endorsement or recommendation of that product or publication by Research Affiliates, LLC.  Any opinions or recommendations from non-affiliated websites are solely those of the independent providers and are not the opinions or recommendations of Research Affiliates, LLC, which is not responsible for any inaccuracies or errors.  THIS INFORMATION IS NOT AN OFFER TO BUY OR A SOLICITATION TO SELL ANY SECURITY OR INVESTMENT PRODUCT.  SUCH AN OFFER OR SOLICITATION IS MADE ONLY BY THE SECURITIES’ OR INVESTMENT PRODUCTS’ ISSUER OR SPONSOR THROUGH A PROSPECTUS OR OTHER OFFERING DOCUMENTATION.  

CANCEL PROCEED